Coronavirus Means the Era of Big Government Is…Back
History shows that national shocks—the Depression, World War
II, the financial crisis—have a way of expanding the role of government
in lasting ways. This one is looking like no exception.
President Reagan spoke of the government as ‘the problem’ in his inauguration speech in 1981.AFP/Getty Images
History shows that big national shocks have a way of changing
the role of government in lasting ways—and any shock as big as the
coronavirus pandemic inevitably will alter political life and philosophies in America. The crisis has been not just a public-health emergency
requiring a sweeping response, but also the cause of the most searing
economic pain since the Great Depression, summoning forth a multi-trillion-dollar government intervention into the economy. Much of today’s new government activism will recede over time
along with the virus. Yet conversations with a broad cross-section of
political figures suggest there is little reason to expect a return to
what had been the status quo on federal spending, or the prevailing
attitude toward the proper role of government. “The era of Ronald Reagan, that said
basically the government is the enemy, is over,” said Rahm Emanuel, a
moderate Democrat who served as mayor of Chicago, a member of Congress
and President Obama’s first White House chief of staff.
An echo came from the other side of the political spectrum.
“The era of Robert Taft, limited-government conservatism?” said Steve
Bannon, President Trump’s onetime political guru, referring to the Ohio
senator who fought the expansion of government programs and federal
borrowing. “It’s not relevant. It’s just not relevant.”
The Great Depression produced both a bigger social safety net
and a host of new government programs, World War II led to the creation
of a unified Defense Department and the Cold War spawned an interstate
highway system. In just the past two decades, the 9/11 terrorist attacks
produced new consolidated agencies to handle homeland security and
national intelligence, and the 2008 financial meltdown led to a broad range of new actions by the Federal Reserve that are being replicated and expanded now. Today, both parties and a vast majority of voters have come
together behind a broad and aggressive response at both the federal and
state level, and have accepted a sea of new red ink at a time the federal budget deficit already was heading toward a trillion dollars annually. Mr. Trump, more a populist activist than a traditional
conservative, has enthusiastically backed that spending, ordered the
construction of pop-up hospitals, used his authority to order companies
to produce supplies, called for an additional federal infrastructure
program and offered an expansive definition of presidential power,
including the power to strip away regulations and bureaucracy in some
instances.
New Agreement
There is bipartisan support for
the government's expanded role during the coronavirus crisis, unlike
during the 2009 recovery from the financial crisis.
*March 2009 Gallup Poll
Source: WSJ/NBC News telephone poll of 900 registered voters conducted from April 13-15; margin of error +/– 3.27 pct. pts.
In a recent Wall Street Journal/NBC News poll, voters of both
political parties said by a 2-to-1 margin that they approved of the
expansion of government’s role in the economy to meet the crisis. Oren Cass, who leads American Compass, a new organization
devoted to revising conservative views on economic policy, argued that
“one lesson we can and should learn from all this is that you can’t just
flip a switch on strong, effective government when you need it. Just as
you can’t get rid of the Defense Department in times of peace and then
reconstitute it from scratch when attacked, you can’t push for the
smallest possible government in normal times and expect to be ready with
a competent response in an emergency.”
At the same time, while there was consensus behind government activism as the crisis struck, a loud and angry backlash now is emerging
over whether the needle has moved too far, particularly on the state
level. Protesters have taken to the streets in recent days, saying that
political leaders, especially
governors, have overstepped their
authority by closing down the economy and putting American jobs and
livelihoods at risk. “We were already headed toward a conversation about whether
we’re going to have a socialist country or a capitalist country,” said
Jenny Beth Martin, co-founder of the Tea Party Patriots, an
organization that sprang up amid grass-roots anger over government
bailouts in the 2008-09 financial crisis. “When we get past the virus,
we’re going to have that debate in a new way.” She and others believe a
government overreaction has taken shape in recent weeks, hurting many
average Americans along the way.
The U.S. built a
social safety net and added government programs during the Great
Depression. Above, a line for new jobs in parks in Cleveland, Ohio, in
1930.
Photo:
Associated Press
Similarly, Scott Reed, senior political strategist at the U.S.
Chamber of Commerce, is skeptical Republicans will continue to embrace
big government in the same way they do now. “The size of the government
is going to make Washington more and more relevant to the business
community,” he said. “But long term, I think the right of center, the
Republican Party, is going to want to roll that back some.” Government spending rises amid crisis,
and tends not to drop back to precrisis levels—at least not for a
while. Economists call the tendency the “ratchet effect.” And while
there is academic debate over its extent, a look back shows that federal
spending as a percentage of the overall economy has never fallen back
to its level before 9/11. The ratchet effect may be more likely in the aftermath of this
crisis because of structural problems layered over crisis spending: an
aging population requiring more social services, aged infrastructure
that needs updating, and the costs of servicing a historically large
level of federal debt. It is too early in this crisis to predict exactly how the size and shape of the government will be affected
in the long run. For now, perhaps the clearest impact has simply been a
shift in the public’s attitude toward government institutions, which
have been much maligned in recent decades. Ratchet EffectGovernment spending rises during crises andtends not to drop back to precrisis levels.Federal net outlays as a percentage of GDPSource: Federal Reserve Bank of St. Louis via St.Louis Fed Former Iowa Democratic Gov. Tom Vilsack, Mr. Obama’s
longest-serving cabinet secretary, said he expects that the “chants”
he’s heard for the past 40 years about government not mattering and
being the problem are likely to fade. “This particular circumstance shows the importance of
government at every level and the need for all branches to be better
coordinated,” he said. “We’ve had people denigrate people in the post
office and federal workers. Well, who are the people working today and
putting themselves on the line?” On the left, the crisis already is putting new energy behind
calls for a nationalized health-care system. Sen. Bernie Sanders has
argued that “the pandemic puts an even brighter spotlight on the
shortcomings of the current corporate-run system,” and his followers are
pushing the argument. The crisis is “expediting” a move toward a more progressive
Democratic Party agenda, said John Della Volpe, the polling director
for RealClear Opinion Research and Harvard University’s Institute of
Politics. Others are skeptical the crisis will fuel something so dramatic
as Medicare for All, the progressive proposal that got so much debate
in the Democratic primary race. “Clearly, inside the party, that
discussion will continue,” said Jim Messina, a Democratic strategist
who ran Mr. Obama’s 2012 campaign. “I don’t think it affects the views
of swing voters.”
Road workers on a stimulus-funded freeway project in San Bernardino County, Calif., in 2009.
Photo:
Nick Ut/Associated Press
On the Republican side, the big government response in the
current crisis stands in stark contrast to the view articulated by the
party’s longtime hero, the late President Reagan, in his first
presidential inaugural address in 1981. Then, amid an earlier dark
economic downturn, he declared: “In this present crisis, government is
not the solution to our problem; government is the problem.” Many Republicans argue that the current economic crisis is
fundamentally different because it was caused by government orders to
shut down businesses and public places to prevent the spread of the
coronavirus, which means aggressive and expensive government action is
justified to rectify the resulting problems. “Because government action is the cause of what is going on,
this action is much more acceptable in response, in Republican ranks,”
said Eric Cantor, formerly the second-ranking Republican in the House. Christopher DeMuth, distinguished fellow at the Hudson
Institute, a nonpartisan think tank influential among conservatives, has
argued that, by clearing away regulatory hurdles for private companies
seeking answers for the virus, Mr. Trump has actually given a
conservative, deregulatory twist to the bout of government activism now
under way.
United Front
The government is winning broader approval during the coronavirus crisis than in 2009.
Q. ‘Do you approve or disapprove of the expansion of the government’s role in the economy?’
2
5
7
Approval is consistent across a variety of demographic groups:
*March 2009 Gallup Poll Source: WSJ/NBC News telephone poll of 900 registered voters conducted from April 13-15.
In the same vein, Sara Fagen, political director in President
George W. Bush’s White House, said that in its response to the health
crisis “government was clunky and slow, but companies quickly turned it
on, so there is some argument for free enterprise.” In addition, Republicans have been willing to embrace the
recently enacted, $2 trillion economic rescue plan because a main
feature was the Paycheck Protection Program, which provides relief to
small businesses. Republicans consider small businesses the economic
force more compatible with their political philosophy than the big banks
that were the main beneficiary of the 2008 rescue package. “Why is it that Republicans are willing to defend PPP?” asked
Karl Rove, chief political strategist for Mr. Bush. “Because it serves
the interests of their constituency, small businesses. Their view of a
modern society is not one dominated by large corporations, but one where
there is opportunity for small entrepreneurs to thrive and move up the
ladder of success.”
Share Your Thoughts
Do you approve of the government’s expanded role in the economy? Join the conversation below.
As the country moves through and beyond the crisis, there will
be a debate about whether renewed government activism, whatever its
extent, ought to come at the national or state level. Governors and
state governments were widely seen as more nimble in responding to the
coronavirus pandemic at the outset, and have taken on an added
prominence that seems likely to persist. Traditionally, Republicans have tended to prefer a federalist
approach, which seeks to move
government power away from the national
government in Washington and out to the governors and
when to order governors to loosen social-isolation restrictions
and reopen their economies runs
directly counter to that traditional
conservative mind-set. Though he subsequently backtracked on trying to
exercise such powers, the tone he struck was decidedly different from
Mr. Reagan’s frequent invocation of the Constitution’s 10th Amendment,
which reserves for the states or the people powers not explicitly
granted to the federal government. Long before this crisis struck, Mr. Trump had been moving the
Republican party away from its Reagan-era embrace of traditional
conservative precepts and toward a more populist view of government’s
role. That populist philosophy isn’t shy about using government power,
or the government’s checkbook, to the benefit of working-class
Americans.
TSA was created and became part of the new Homeland Security department after 9/11. Above, Los Angeles International airport.
Photo:
mario anzuoni/Reuters
Thus, in the midst of the crisis, the Trump administration declared that the federal government would pay the coronavirus health bills
of any Americans without health insurance—and reimburse health-care
providers at the rates paid by the Medicare health program for the
elderly. That step appeared to offer at least a glancing nod toward a
Medicare for All system long advocated by the Democrats’ left wing. Moreover, in direct contradiction to traditional Republican antipathy to deficit spending and a growing national debt,
Mr. Trump has explicitly argued in favor of borrowing, at a time of low
interest rates, to finance a new, $2 trillion bill to rebuild and
improve the nation’s infrastructure. Even before the crisis, there was a
push for a larger national effort to build out a 5G wireless network, a
cause that seems even more relevant now that much of the nation’s work
and learning has moved online. Mr. Bannon argues that voters will see a powerful central
government as essential as the U.S. moves into a long-term era of
confrontation with China, where the coronavirus originated. A broad
period of tension, he said, “is going to change the focus of
government.” In the long run, the impact of the crisis may depend on how
quickly or how slowly the economy bounces back. Voters’ reaction may
break not along ideological or personality lines, but rather in favor of
more competent government at all levels—government that efficiently
builds stockpiles of needed supplies for use in a national crisis, for
instance, and responds quickly and efficiently when one strikes. “The way the pendulum swings, the quieter, competent leaders might be more in fashion,” said nonpartisan pollster J. Ann Selzer. Write to Gerald F. Seib at jerry.seib@wsj.com and John McCormick at mccormick.john@wsj.com
_________________________________
The Secret Group of Scientists and Billionaires Pushing a Manhattan Project for Covid-19
They are working to cull the world’s most promising research
on the pandemic, passing on their findings to policy makers and the
White House
Tom Cahill, founder and managing partner at Newpath Partners in Boston.Kayana Szymczak for The Wall Street Journal
By
Rob Copeland
A dozen of America’s top scientists and a collection of billionaires and industry titans say they have the answer to the coronavirus pandemic, and they found a backdoor to deliver their plan to the White House. The eclectic group is led by a 33-year-old
physician-turned-venture capitalist, Tom Cahill, who lives far from the
public eye in a one-bedroom rental near Boston’s Fenway Park. He owns
just one suit, but he has enough lofty connections to influence
government decisions in the war against Covid-19. These scientists and their backers describe their work as a
lockdown-era Manhattan Project, a nod to the World War II group of
scientists who helped develop the atomic bomb. This time around, the
scientists are marshaling brains and money to distill unorthodox ideas
gleaned from around the globe. They call themselves Scientists to Stop
Covid-19, and they include chemical biologists, an immunobiologist, a
neurobiologist, a chronobiologist, an oncologist, a gastroenterologist,
an epidemiologist and a nuclear scientist. Of the scientists at the
center of the project, biologist Michael Rosbash, a 2017 Nobel Prize
winner, said, “There’s no question that I’m the least qualified.” This group, whose work hasn’t been previously reported, has
acted as the go-between for pharmaceutical companies looking for a
reputable link to Trump administration decision makers. They are working
remotely as an ad hoc review board for the flood of research on the
coronavirus, weeding out flawed studies before they reach policy makers. The group has compiled a confidential 17-page report that calls for a
number of unorthodox methods against the virus. One big idea is
treating patients with powerful drugs previously used against Ebola,
with far heftier dosages than have been tried in the past. The Food and Drug Administration and the Department of Veterans
Affairs have already implemented specific recommendations, such as
slashing manufacturing regulations and requirements for specific
coronavirus drugs.
National Institutes of Health Director Francis Collins told people
this month that he agreed with most of the recommendations in the
report, according to documents reviewed by The Wall Street Journal and
people familiar with the matter. The report was delivered to cabinet
members and Vice President Mike Pence, head of the administration’s
coronavirus task force. Dr. Cahill’s primary asset is a young lifetime of connections
through his investment firm. They include such billionaires as Peter
Thiel, Jim Palotta and Michael Milken—financiers who afforded him the
legitimacy to reach officials in the middle of the crisis. Dr. Cahill
and his group have frequently advised Nick Ayers, Mr. Pence’s longtime
aide, and agency heads through phone calls over the past month. No one involved with the group stands to gain financially. They
say they are motivated by the chance to add their own connections and
levelheaded science to a coronavirus battle effort that has, on both
state and federal levels, been strained. “We may fail,” said Stuart Schreiber, a Harvard University
chemist and a member of the group. “But if it succeeds, it could change
the world.” Steve Pagliuca, co-owner of the Boston Celtics and the
co-chairman of Bain Capital—as well as one of Dr. Cahill’s
investors—helped copy edit drafts of their report, and he passed a
version to Goldman Sachs Group Inc. Chief Executive David Solomon. Mr.
Solomon got it to Treasury Secretary Steven Mnuchin.
The group’s members say they are aware that many of their ideas
may not be implemented, and could be ignored altogether by the Trump
administration. This account is based on interviews with scientists,
businesspeople, government officials, as well as a review of related
documents.
Break out
Only two years ago, Dr. Cahill was studying
for his M.D. and PhD. at Duke University, conducting research on rare
genetic diseases and wearing $20
Costco
slacks. He assumed he would continue the work after graduation. Instead, he reconnected with a friend who introduced him to a
job at his father’s company, the blue-chip investment firm the Raptor
Group. Dr. Cahill got hooked on investing, particularly in life
sciences. He reasoned he could make a bigger impact by identifying
promising scientists and helping them troubleshoot problems—both
scientific and financial—than doing research himself. After a stint at Raptor, he formed his own fund, Newpath
Partners, with $125 million from a small group of wealthy investors,
including Silicon Valley stalwart Mr. Thiel and private-equity founders
like Mr. Pagliuca. They were attracted to his blunt approach, as well as
his interest in tackling intractable problems. In early March, as the Covid-19 death toll mounted, Dr. Cahill
was intrigued and a little depressed with the state of research on the
virus. “Science and medicine were the furthest things removed from
everything happening,” he said.
Vice President Mike
Pence at the lectern during a news briefing with members of the
coronavirus task force. Behind Mr. Pence, from left, Robert Redfield,
Anthony Fauci, Deborah Birx, Seema Verma, Alex Azar, and Stephen Hahn.
Photo:
michael reynolds/EPA/Shutterstock
His investors peppered him with questions about the virus, and
he organized a conference call to share some against-the-grain ideas on
how to accelerate drug development and the like. He expected about 20
people. When Dr. Cahill tried to dial in the meeting, he was rejected
because the call had reached capacity. Then his cellphone buzzed from a
New York number. It was National Basketball Association Commissioner
Adam Silver. He, too, wanted the meeting’s access code. Dr. Cahill later
gave him a personal briefing. Newpath’s deep-pocketed investor base had spread word of the
call, and hundreds of people were on the line, most of whom he had never
met, including Mr. Milken. When he finally got on the call, Dr. Cahill took a deep breath
and said he had been working with friends to whittle down potential
Covid-19 treatments to the most promising. He said he largely dropped
his investing work to focus on a hunt for a cure. After an hour, he hung up and found his email inbox full of
ideas and offers to help, including from Mr. Milken’s team. “For the 50
years I’ve been involved in medical research I have never seen
collaboration as we have today,” Mr. Milken said.
President Trump at an
April 13 news briefing. Behind the president, from left, Deborah Birx,
Treasury Secretary Steven Mnuchin and Vice President Mike Pence.
Photo:
Yuri Gripas/CNP/Zuma Press
Dr. Cahill received a handful of notes from advisers to the vice president. They also had been on the call. The scientist-investor had gained a platform. All he needed was a plan.
Tracing contacts
One of Dr. Cahill’s first calls was to Mr. Schreiber, a founder of several private companies. Mr. Schreiber looped in a longtime friend, Edward Scolnick, former head of research and development at pharmaceutical giant
Merck
& Co., where he helped develop 28 new drugs and vaccines. Dr.
Scolnick was blunt: A vaccine would take at least 18 months to hit the
market under normal circumstances, he told Mr. Schreiber, “if you’re
damn lucky.” Mr. Schreiber responded, “What about six months?” The team drew up a list of roughly two dozen companies that
could benefit from their recommendations and pledged to sell any shares
in them immediately. One early member said he couldn’t and was kicked
out.
Share Your Thoughts
What is your assessment of the group’s Covid-19 plan?Join the conversation below.
Much of the early work involved divvying up hundreds of
scientific papers on the crisis from around the world. They separated
promising ideas from dubious ones. Each member blazed through as many as
20 papers a day, around 10 times the pace they would in their day jobs.
They gathered to debate via videoconference, text messages—“like a
bunch of teenagers,” Mr. Rosbash said—and phone calls. Personal hygiene went by the wayside. Michael Lin, a Stanford
University neurobiologist, began disabling the camera on his phone to
protect his vanity. “A couple of days, I’ve had 7 or 8 Zoom meetings,
which will itself I’m sure cause some kind of disease,” he joked. Debates haven’t always been purely science. The group
discussed, for instance, whether to suggest that public-health
authorities rename the virus “SARS-2,” after the 2003 China animal
virus. To them, the name sounded scarier and might get more people to
wear face masks. They dropped it. The team pledged to try to block out politics—not an easy task in the noise and fury of a presidential election year. Hydroxychloroquine, a malaria drug promoted by the president,
was dismissed after the group’s resident expert, Ben Cravatt of Scripps
Research in La Jolla, Calif., determined it was a long shot at best. The
drug received only a passing mention in the group’s final report.
The group also disparaged the idea of using antibody testing
to allow people back to work if their results showed they had recovered
from the virus. Mr. Cravatt, a chemical biologist, declared it “the
worst idea I’ve ever heard.” He said that prior exposure may not prevent
people from giving the virus to others, and that overemphasizing
antibody testing might tempt some people to intentionally infect
themselves to later obtain a clean bill of health. The group’s initial three phases of recommendations, contained
in its report, center on leveraging the scale of the federal government.
For instance, buy medicines not yet proven effective as a way to
encourage manufacturers to ramp up production without worrying about
losing money if the drugs fail. Another is to slash the time required
for a clinical review of new drugs to a week from nine months or a year.
The group next needed to get their recommendations to the right
people in the Trump administration. For that, Dr. Cahill tapped another
well-placed billionaire.
An introduction
Brian Sheth, co-founder of
private-equity firm Vista Equity Partners, and a Democrat, had been
watching the effort gather steam from his home in Austin, Texas. He was
an early investor in Dr. Cahill’s fund and had been on the first call.
His expertise was technology, though, not immunology. He had become friendly with Thomas Hicks Jr., the Dallas
businessman and co-chairman of the Republican National Committee. Mr.
Sheth introduced Mr. Hicks to Dr. Cahill’s group.
Hydroxychloroquine pills.
Photo:
John Locher/Associated Press
Brian Sheth, co-founder and president of Vista Equity Partners, last year in Beverly Hills, Calif.
Photo:
Patrick T. Fallon/Bloomberg News
The connection cinched ties between a group of mostly liberal
scientists from left-leaning institutions with a Republican stalwart who
hunts birds with Donald Trump Jr. In his first chat with the group, Mr. Hicks said, “I’m not a
scientist. Make it clear enough for me, and then tell me where the red
tape is.” A major concern of the scientists was the FDA. The scientists
had in their research identified monoclonal antibody drugs that latch
onto virus cells as the most promising treatment. But to make the
medicine in sufficient quantities, one drugmaker,
Regeneron Pharmaceuticals Inc.,
would have to shift some of its existing manufacturing to Ireland. FDA rules required a monthslong wait for approval. Mr. Scolnick, who had tussled with bureaucracy during the AIDS
epidemic, tried reaching the FDA. The call ended poorly after the
bureaucrats told the group they already had the pandemic under control.
In a group call afterward, one of the scientists said, of the FDA:
“They’re the problem here.”
A
growing number of hospitals are investigating antibody testing and
blood plasma therapy as a way to combat the new coronavirus in sick
patients. WSJ’s Daniela Hernandez explains. Photo illustration: Laura
Kammermann
Dr. Cahill got in touch with Mr. Ayers. Once the group briefed
the vice president’s aide on the bottleneck, Mr. Ayers said he knew who
to call. That evening, March 27, Regeneron received a call from the FDA.
They had permission, starting immediately, to shift production to
Dublin. “That was proof positive that what we were doing was starting to work,” Mr. Rosbash said. The group also made inroads with the VA, the largest health
care system in the U.S. The scientists pushed the division’s medical
staff to allow veterans with Covid-19 to join existing studies in such
areas as prostate cancer, to see if already-approved drugs might be
effective against the virus. They spoke to the VA’s chief medical
officer and secretary about the proposal and learned the initiative was
being fast-tracked. Mr. Pagliuca spoke to Charles Baker, the Republican governor
of Massachusetts, on the phone about the report. The governor, Mr.
Pagliuca said, planned to adopt elements of the plan.
Steve Pagliuca, co-chairman of Bain Capital.
Photo:
Simon Dawson/Bloomberg News
With much of their scientific proposals under advisement, or
already in the process, the group has an eye on the post-Covid-19 world.
Mr. Pagliuca pushed the scientists to add a fourth phase to the
plan—reopening America. The ideas include development of a saliva test, and scheduling
such test at the end of the workday so results are available by morning.
They also have suggested a nationwide smartphone app that requires
residents to confirm each day that they don’t have any of 14 symptoms of
a cold or fever. Group members have continued their discussions with
administration officials in recent days, hoping their confidential plan
turns to action. “We need the entire nation—government, business and science—to unite to defeat this,” Mr. Pagliuca said. Write to Rob Copeland at rob.copeland@wsj.com ________________________________
A demonstrator in Olympia, Wash., protested stay-at-home orders this month.
Photo:
Elaine Thompson/Associated Press
President Donald J. Trump MASTER AMERICAN PLAN Coronavirus Outbreak President Trump And the White House Coronavirus Task Force ~ Google Is Violation OF Freedom OF Press Google Says We’re Updating Our Terms OF Service. Get To Know Our New Terms Before They Take Effect On March 31, 2020.
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Report This A Real Photo OF Meghan O’Sullivan Harvard Law School School
Board Member Talks With Susan Rice About The Russian Spies Using The
Clinton Foundation Influencing Presidential Election 2016 With Hunter Biden Ukraine’s Burisma.
Burisma Holdings is among Ukraine's largest independent natural gas companies. The
company was founded in 2002 by Mykola Zlochevsky, an ally of the former
Ukrainian President Viktor Yanukovych — the pro-Russia leader who was ousted in 2014 and has lived in exile in Russia ever since. Burisma is owned by the Cyprus-based offshore company Brociti Investments Limited, which records show is owned Zlochevsky, BuzzFeed News reported. Zlochevsky served as Ukraine's ecology minister under Yanukovych, assuming the role in 2010. Zlochevsky also fled the country not long after Yanukovych went into exile, according to The New York Times,
as the office of Ukraine's prosecutor general opened multiple
investigations into him and his businesses — including suspicion of tax
evasion and money laundering.
Hunter Biden served on the Burisma board from 2014 to April of this year.
Photo:
Teresa Kroeger/Getty Images for World Food Program USA
By
Jessica Donati
WASHINGTON—A consulting firm hired by Burisma Group mentioned
that former U.S. Vice President Joe Biden’s son served on the Ukrainian
gas company’s board so the firm could leverage a meeting with the State
Department, according to documents and a former U.S. official. The
documents—email exchanges between State Department staff members made
public this week—show that the consulting firm, Washington-based Blue
Star Strategies, used Hunter Biden’s name in a request for a State
Department meeting and then mentioned him again during the meeting as
part of an effort to improve Burisma’s image in Washington.
Mr. Biden was appointed to the Burisma board in 2014, when the
company and its owner faced allegations of corruption, and he remained
there until April of this year. It isn’t clear whether the
younger Mr. Biden knew his name was being used by Blue Star in its
contacts with State Department officials on Burisma’s behalf in early
2016. A lawyer for Mr. Biden didn’t respond to a request for comment. Hunter
Biden served on Burisma’s board when his father, then the vice
president, was overseeing U.S. efforts to get Ukraine to reduce
corruption. That arrangement has drawn allegations from
President Trump and his allies that the younger Mr. Biden sought to
profit from his father’s name. Mr. Trump asked Ukraine’s leader to
investigate the Bidens—an act at the center of the House’s impeachment
inquiry. Both Bidens deny any wrongdoing.
Timeline: Interactions Between Trump's Camp and Ukraine
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President Trump's efforts to persuade Ukraine to investigate
his political rival, former Vice President Joe Biden, have set off an
impeachment inquiry by House Democrats. WSJ's Shelby Holliday lays out a
timeline of interactions between the president's inner circle and
Ukrainian officials. Photo Composite: Laura Kammermann/The Wall Street
Journal
The email exchanges between State Department staffers show
that Karen Tramontano, chief executive of Blue Star, cited Mr. Biden’s
position in trying to secure a meeting with a senior official at the
State Department. “She
noted that two high profile U.S. citizens are affiliated with the
company (including Hunter Biden as a board member),” the special
assistant at the Office of the Undersecretary for Economic Growth,
Energy and the Environment wrote in the Feb. 24, 2016, email. Ms.
Tramontano met with the undersecretary, Catherine Novelli, on March 1,
2016, the documents show. During the meeting, Ms. Tramontano mentioned
Mr. Biden served on the company’s board, according to a former State
Department official familiar with the discussion. In the contacts
with the State Department, Ms. Tramontano said that Burisma hadn’t
engaged in corruption and wanted to change the view of the company in
Washington. The former official said that Hunter Biden’s position on the
board wasn’t the reason that Ms. Novelli took the meeting and that no
further action was taken after it took place. The State Department didn’t immediately respond to a request for comment. Blue Star declined to comment for this article. The
documents were released in response to a Freedom of Information Act
request submitted by John Solomon, who first published the documents on
the website Scribd.com. A copy of the emails were subsequently made
available to The Wall Street Journal by the law firm that represented
Mr. Solomon, Southeastern Legal Foundation, a conservative public
interest nonprofit. The documents don’t name Devon Archer, Hunter Biden’s longtime business partner, who was also on the Burisma board. The
documents were released after the Southeastern Legal Foundation filed a
complaint against the State Department. The U.S. District Court for the
District of Columbia ordered the department to release the documents. Blue
Star’s efforts for Burisma came as the company and its Ukrainian tycoon
founder, Mykola Zlochevsky, faced investigations in Ukraine focused on
allegations of tax irregularities, money laundering and illegal
enrichment Mr. Zlochevsky was never charged, and a lawyer for
Burisma said at the time that the investigations were closed because of a
lack of evidence. The dropping of the investigations in 2016
came after Ukraine’s prosecutor general was dismissed. Vice President
Biden and European Union officials had brought pressure on the
prosecutor, seeing him as a hindrance to anticorruption efforts. His
dismissal has been seized upon by Mr. Trump’s personal attorney Rudy
Giuliani as evidence that Vice President Biden exerted undue pressure on
Kyiv to help his son. President
Trump and Mr. Giuliani have asked Ukraine to investigate the Bidens.
State Department and other officials testifying in the House impeachment
inquiry have said that military aid and the prospect of a White House
meeting were withheld until the Ukrainian government agreed to
investigate. Last month, Ukraine’s prosecutor general said it was reviewing past investigations, raising the possibility of restarting probes. Write to Jessica Donati at jessica.donati@wsj.com
A Ukraine gas company tied to Joe Biden's son is at the center of Trump's impeachment
The obama regime gets kick out of Texas Vice
President Joe Bite Me Biden son Hunter Nuts Biden goes to Beijing December 4, 2013.
A Ukrainian gas
company with ties to former Vice President Joe Biden's son has
repeatedly been mentioned in relation to President Donald Trump's impeachment.
During
a July 25 phone call, Trump urged Ukraine's president to launch
investigations into former Vice President Joe Biden and his son, Hunter
Biden, as well as a debunked conspiracy theory related to 2016.
Trump wanted Ukraine to launch an investigation into Hunter's work for Burisma Holdings, a Ukrainian natural gas company.
Hunter
began working for Burisma in 2014. This was around the same time the
former vice president was spearheading the Obama administration's
efforts to pressure Ukraine to root out corruption.
Trump and
his personal lawyer Rudy Giuliani have suggested, without evidence, that
Biden improperly pressured Ukraine to fire a prosecutor who had at one
point been investigating Burisma Holdings.
Though some ethics
watchdogs have criticized Hunter's decision to work for Burisma in light
of who his father is, there's no evidence of wrongdoing or illegal
activity on his part or the former vice president's.
And there's nothing concrete to support the suggestion Biden pressured Ukraine to take actions to the benefit of his son.
With
the Senate impeachment trial underway, Trump's defense team has
continued to suggest the Bidens were guilty of corruption in Ukraine
despite a lack of evidence.
A Ukrainian gas company called Burisma Holdings has repeatedly come up in relation to President Donald Trump's impeachment. In a July 25 phone call, Trump urged Ukrainian President Volodymyr
Zelensky to launch investigations into former Vice President Joe Biden
and his son, Hunter Biden, as well as a bogus conspiracy theory that
Ukraine, not Russia, interfered in the 2016 election. Trump
wanted Zelensky launch an inquiry into the Bidens in relation to
Hunter's work for Burisma, despite no evidence of wrongdoing or illegal
activity on the part of either of them. Here's what we know about the company and how it's involved in the back-and-forth between Trump and the Bidens.
Fast facts about Burisma Holdings:
Burisma Holdings is among Ukraine's largest independent natural gas companies.
Burisma is owned by the Cyprus-based offshore company Brociti Investments Limited, which records show is owned Zlochevsky, BuzzFeed News reported.
Zlochevsky served as Ukraine's ecology minister under Yanukovych, assuming the role in 2010.
Zlochevsky also fled the country not long after Yanukovych went into exile, according to The New York Times,
as the office of Ukraine's prosecutor general opened multiple
investigations into him and his businesses — including suspicion of tax
evasion and money laundering.
What we know about Hunter Biden's role at Burisma:
In April 2014, Biden's son Hunter joined the board of Burisma Holdings. Hunter served on the board until early 2019.
At the time, a news release
from the company said Hunter would be "in charge of the Holdings' legal
unit and will provide support for the Company among international
organizations."
Hunter told the New York Times that the news release was not accurate and he was never in charge of the company's legal affairs.
He
joined the company about a month after Russia annexed Crimea, a
cataclysmic moment that continues to put the US at odds with Russia and
is linked to ongoing conflict in eastern Ukraine.
During his time with Burisma, Hunter reportedly received compensation up to $50,000 a month.
From the start, Hunter's role at Burisma was criticized by ethics watchdogs
as a conflict of interest for his father, who was still vice president
at the time and heavily focused on pressuring Ukraine to do a better job
rooting out corruption. But some ethics watchdogs at the time also said
that unless there was clear evidence Hunter got the job to influence US
foreign policy then there was no cause for concern.
His hiring
by Burisma was seen as an attempt by the company to bolster its image
and the perception it had strong ties to the US as the world vilified
Russia for its annexation of Crimea, the Times reported.
Yoshiko
M. Herrera, a professor of political science at the University of
Wisconsin at Madison and an an expert on Russia and Eurasia, told The Washington Post:
"I think there is a conflict of interest even if it doesn't break any
laws. It's a big deal. It's the vice president, who is the point person
of the Obama administration's policy on Ukraine, and his son is suddenly
hired to be a director on the board of Ukraine's largest private gas
producer."
With that said, Hunter has never been accused of wrongdoing regarding his work with Burisma.
Hunter also said he only had one brief conversation with his father about Burisma which did not go into substantive details about the deal. Joe Biden has said he learned about his son's role at the company from news reports.
Here's why this is now linked to Trump's impeachment:
Trump
and his attorney Rudy Giuliani have suggested that Biden improperly
leveraged his role as vice president to push for the ousting of a man
named Viktor Shokin as Ukraine's top prosecutor in order to help his son
avoid getting caught up in corruption investigations.
Trump has
admitted that in a July 25 call with Ukrainian President Volodymyr
Zelensky, who was elected in April, that he addressed investigating
Biden and his son.
The White House released a memo on the call that showed Trump repeatedly pressuring Zelensky to investigate the Bidens.
"There's
a lot of talk about Biden's son, that Biden stopped the prosecution and
a lot of people want to find out about that," Trump said to Zelensky on
the call, according to the memo. "If you can look into it … it sounds
horrible to me."
The call is also central to a whistleblower complaint
from an intelligence official that says Trump, among other things,
asked Zelensky to "initiate or continue an investigation into the
activities of former Vice President Joseph Biden and his son, Hunter
Biden."
The complaint alleges Trump has used "the power of his
office to solicit interference from a foreign country in the 2020 US
election."
The scandal surrounding the call and whistleblower
complaint sparked an impeachment inquiry into Trump that ultimately led
to his impeachment.
Trump has tried to flip the situation
around, contending that the real issue is the role Biden played in
Ukraine as vice president and keeps pointing to Shokin's firing and
Hunter's work for Burisma.
After Shokin was appointed as
Ukraine's prosecutor general in February 2015, he inherited the
investigations into Zlochevsky. He also ultimately launched another
probe into the profitable gas licenses that were awarded to Zlochevsky's
companies as he served as a top minister in Yanukovych's government.
For
months before that, the US and other countries had pressured for Shokin
to be ousted because he didn't make a concerted effort to fight
corruption. Biden, who was spearheading the Obama administration's
Ukraine work, was at the center of these efforts, and threatened to withhold $1 billion in loan guarantees from Ukraine if Shokin wasn't fired.
So,
it's true that Biden was among those who pushed for Shokin to be fired
as Ukraine's top prosecutor, but by the time this happened the probe
into Burisma was dormant, according to Bloomberg.
According to the Times,
Ukrainian and American officials have also debated whether Shokin was
using the threat of prosecution against Burisma in order to solicit a
bribe.
Daria Kaleniuk, co-founder of the Ukrainian Anti-Corruption Action Center told The Washington Post,
"Shokin was not investigating. He didn't want to investigate Burisma.
Shokin was fired not because he wanted to do that investigation, but
quite to the contrary, because he failed that investigation."
Yuriy Lutsenko, Ukraine's former prosecutor general who left the post at the end of August, told Bloomberg
in an interview in May that neither Biden nor Hunter are the subject of
investigations: "I do not want Ukraine to again be the subject of US
presidential elections. Hunter Biden did not violate any Ukrainian laws —
at least as of now, we do not see any wrongdoing. A company can pay
however much it wants to its board."
Lutsenko added: "At the end of the day, Shokin submitted his own resignation."
Additionally, Lutsenko on September 26 told The Washington Post: "From the perspective of Ukrainian legislation, [Hunter Biden] did not violate anything."
On October 4, it was reported Ukraine's new prosecutor general, Ruslan Ryaboshapka, is reviewing past investigations into the owner of Burisma. This raised the possibility of inquiries being restarted, the Wall Street Journal reported.
Ryaboshapka on October 4 also told Reuters
he's not aware of any evidence of wrongdoing on Hunter's part and that
he'd not been in touch with any foreign lawyers regarding the case.
Multiple
witnesses in the impeachment inquiry have said there's no evidence of
illegal activity on the part of the Bidens in relation to Burisma.
Witnesses
have also tied Trump's decision to freeze roughly $400 million in
military aid to Ukraine to his call for investigations, suggesting there
was an explicit quid pro quo. In short, they've alleged Trump withheld
the aid as part of an effort to pressure Ukraine into launching an
investigation that would smear Biden's name and benefit the president
politically.
In the Senate impeachment trial, Trump's defense
team has continued to shift attention away from the president and toward
Hunter and the former vice president.
Biden has rejected
suggestions from Republicans that he should testify in the impeachment
trial. "I have nothing to defend. This is all a game," Biden told
reporters on January 27.
GOP Senators Appear Likely to Block Witnesses in Impeachment Trial
Senate to vote Friday on whether to introduce additional evidence
Sen. Lisa Murkowski
(R., Alaska) said she would announce her position on voting to call
witnesses Friday after reviewing her notes.
Photo:
Julio Cortez/Associated Press
By
Andrew Duehren
WASHINGTON—Senate Republicans appear likely to end President Trump’s impeachment trial without considering new witnesses or documents on Friday, moving closer to acquitting him of both impeachment articles. The
Senate will vote Friday on whether to introduce additional evidence in
the trial after the House Democratic impeachment managers and the
president’s defense team each present arguments on the question for two
hours.
Sen. Lamar Alexander
(R., Tenn.), considered one of the key swing votes on the
measure, said Thursday night that he would vote no, bolstering
Republican chances of blocking Democratic efforts to extend the trial. Without new evidence or witnesses, the Senate could complete
the trial later Friday, though Democrats have indicated they may force
additional votes that some lawmakers are cautioning could extend the
process into early Saturday. While a simple majority is necessary to
consider more evidence, two-thirds of the Senate would need to vote to
convict Mr. Trump for him to be removed from office. The question
of bringing in new evidence has been at the heart of the nine days of
arguments and questioning, pitting Democrats—who want to acquire
additional material—against Republicans who have sought to quickly vote
to acquit Mr. Trump and avoid potentially dramatic testimony. Each
of the 47 Democrats in the chamber has previously voted in favor of new
evidence and at least four Republicans would need to join with
Democrats for the chamber to move forward with introducing new material.
Sen. Susan Collins
(R., Maine) said Thursday night that she would vote in favor of
new witnesses and
Sen. Mitt Romney
(R., Utah) has said he would like to hear testimony from
John Bolton,
Mr. Trump’s former national security adviser. Sen. Lisa Murkowski (R., Alaska), another swing vote, said she would announce her position Friday after reviewing her notes.
Sen. Lamar Alexander (R., Tenn.) said Thursday he would vote no on calling witnesses.
Photo:
mary f. calvert/Reuters“I’m going to go back, put some eye drops in so I can keep
reading, and I’ve been forming a lot of thoughts,” she said Thursday
night. If Ms. Murkowski were to join Ms. Collins and Mr. Romney
to vote in favor of new evidence and every other Republican voted
against it, the Senate could tie 50-50 on whether to call witnesses. A
tie raises the possibility of Chief Justice
John Roberts
intervening in the vote, though experts have cautioned that is
unlikely and lawmakers in both parties have said they hope to avoid
needing a tiebreaker. In the question-and-answer session
Thursday, Ms. Murkowski joined Mr. Alexander and several other
Republicans to cast skepticism on the relevance of Mr. Bolton’s
testimony. In leaked manuscripts of his book,
Mr. Bolton wrote that Mr. Trump told him he was freezing security aid
to Ukraine until it opened investigations into former Vice President
Joe Biden,
a leading Democratic presidential candidate, and other matters.
Mr. Bolton has said he would testify if subpoenaed by the Senate. “Isn’t
it true that the allegations still would not rise to the level of an
impeachable offense, and that therefore for this and other reasons his
testimony would add nothing to the case?” the question signed by Mr.
Alexander and Ms. Murkowski read. Sen. Roy Blunt
(R., Mo.), a member of the GOP leadership in the chamber, said
the question encouraged the leadership that the senators would vote to
block new evidence in the trial. Ms. Collins and Mr. Romney didn’t join
the question. The charge that Mr. Trump linked the hold on roughly $400 million in security aid
this summer to opening investigations of Democrats was at the center of
the House impeachment inquiry. Mr. Trump has denied that the two were
related, saying he held the aid to both investigate corruption in
Ukraine and ensure other countries were contributing to its defense; he
has called the impeachment case against him a hoax. Mr. Trump and
his allies have alleged that it was corrupt for Mr. Biden during the
Obama administration to seek the ouster of a Ukrainian prosecutor who
had once investigated a Ukrainian gas company where Mr. Biden’s son
Hunter sat on the board. Mr. Biden sought the prosecutor’s removal as
part of a broad international effort to combat corruption in Ukraine.
The Bidens have denied any wrongdoing, though Hunter Biden has said it
was poor judgment on his part to serve on the Burisma board, which paid
him $50,000 a month, while his father was involved with Ukraine policy
as vice president.
Sen. Lamar Alexander (R., Tenn.) said Thursday he would vote no on calling witnesses.
Photo:
mary f. calvert/Reuters“I’m going to go back, put some eye drops in so I can keep
reading, and I’ve been forming a lot of thoughts,” she said Thursday
night. If Ms. Murkowski were to join Ms. Collins and Mr. Romney
to vote in favor of new evidence and every other Republican voted
against it, the Senate could tie 50-50 on whether to call witnesses. A
tie raises the possibility of Chief Justice
John Roberts
intervening in the vote, though experts have cautioned that is
unlikely and lawmakers in both parties have said they hope to avoid
needing a tiebreaker. In the question-and-answer session
Thursday, Ms. Murkowski joined Mr. Alexander and several other
Republicans to cast skepticism on the relevance of Mr. Bolton’s
testimony. In leaked manuscripts of his book,
Mr. Bolton wrote that Mr. Trump told him he was freezing security aid
to Ukraine until it opened investigations into former Vice President
Joe Biden,
a leading Democratic presidential candidate, and other matters.
Mr. Bolton has said he would testify if subpoenaed by the Senate. “Isn’t
it true that the allegations still would not rise to the level of an
impeachable offense, and that therefore for this and other reasons his
testimony would add nothing to the case?” the question signed by Mr.
Alexander and Ms. Murkowski read. Sen. Roy Blunt
(R., Mo.), a member of the GOP leadership in the chamber, said
the question encouraged the leadership that the senators would vote to
block new evidence in the trial. Ms. Collins and Mr. Romney didn’t join
the question. The charge that Mr. Trump linked the hold on roughly $400 million in security aid
this summer to opening investigations of Democrats was at the center of
the House impeachment inquiry. Mr. Trump has denied that the two were
related, saying he held the aid to both investigate corruption in
Ukraine and ensure other countries were contributing to its defense; he
has called the impeachment case against him a hoax. Mr. Trump and
his allies have alleged that it was corrupt for Mr. Biden during the
Obama administration to seek the ouster of a Ukrainian prosecutor who
had once investigated a Ukrainian gas company where Mr. Biden’s son
Hunter sat on the board. Mr. Biden sought the prosecutor’s removal as
part of a broad international effort to combat corruption in Ukraine.
The Bidens have denied any wrongdoing, though Hunter Biden has said it
was poor judgment on his part to serve on the Burisma board, which paid
him $50,000 a month, while his father was involved with Ukraine policy
as vice president.
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